Justin.tv Spinoff Twitch Raises $20M for Live Video Gaming

Live video gaming platform Twitch has been on a growth tear this past year and has raised $20 million from investors to rip it up some more.

Bloomberg

Unlike competitors Ustream, LiveStream, YouTube and others enabling individuals and companies to broadcast video to the masses, Twitch is focused on just one category: gaming.

The company provides an online platform and community for gamers that features live streaming gaming events, personal streams of individual players in action, and talk shows dedicated to gaming.

Individual players who bring in large audiences to watch them play get a portion of revenue generated from advertisements on their stream. The company says some gamers are earning six-figure salaries by gaming full time on the Twitch platform, and it expects the number of gamers to grow when Microsoft’s Xbox One and Sony’s PlayStation 4 consoles launch this fall and gamers can broadcast and view Twitch content with a single button.

Previously, players had to use third-party software and install one or more hardware components to stream from a console.

The San Francisco-based company, which was spun off from Justin.tv, a Y Combinator startup that also hatched SocialCam, says it has more than doubled its monthly active viewers during the past year from 20 million to 45 million. The number of content creators, which include game developers, game publishers and independent gamers, have grown to 4,500 from 2,000 in September 2012.

Adding to the company’s anticipated growth, according to investors, is its broad global reach. Roughly 30% of Twitch viewers are in North America, 35% in Western Europe, 10% in Eastern Europe, 13% in East Asia and the balance in South America and other regions.

“The international base proved this is a global market–it’s not just endemic to the United States,” said Chris Paik, a partner at Thrive Capital who led the round and has been tracking Twitch since it launched in 2011.

Other new investors in the Series C round, which pushes Twitch’s total outside funding to $42 million, include WestSummit Capital and Take-Two Interactive Software. Existing investors including Alsop Louie Partners and Bessemer Venture Partners also participated.

“I still consider us very lightly funded,” said Twitch Chief Operating Officer Kevin Lin. “Video is not a cheap business.”

Mr. Lin said much of the round will be used to scale infrastructure worldwide–the company now has 15 server farms globally–and hire more advertising salespeople.

The company which was profitable last year but is not currently, is in the process of settling into new San Francisco headquarters and ramping its advertising sales team, which it began building earlier this summer. Twitch generates revenue from both advertising and channel subscriptions.

Email Lizette Chapman at lizette.chapman@wsj.com. Follow her on Twitter at @zettewil